Indian mining behemoth Adani cleared in financial fraud investigation

Adani Group has denied allegations of overvaluing the power equipment used in its projects in IndiaGetty Images
Indian mining giant Adani Group has been cleared of illegally siphoning money to offshore tax havens by the country’s customs authority.

Indian customs investigators had raised allegations in 2014 that Adani was using a front company in Dubai and other intermediaries to overvalue machinery and equipment imported for electricity projects in India.

The inflated amounts paid for the equipment were alleged to have been routed to a holding company in Mauritius managed by Vinod Shantilal Adani, the older brother of Adani Group chief executive Gautam Adani.

However, an official at India’s Directorate of Revenue Intelligence (DRI) appointed to adjudicate the case struck down the claims this week, the Indian Express newspaper reported.

KVS Singh said that while the Adani subsidiaries operating power projects in the states of Rajasthan and Maharashtra were connected to the Dubai front company EIF through Vinod Adani, he had come to the conclusion that the relationship had not affected the transaction value of the imported equipment.

“I find that the allegation that the impugned goods were overvalued does not hold water,” he said in his ruling on 22 August.

Sources told the Indian Express that the ruling was a big blow to a separate DRI investigation against the Adani Group and other Indian firms that are looking into claims they overvalued electricity equipment imports through a similar modus operandi.

The Adani Group has denied the allegations, with the company saying in a statement to the Guardian that it would continue to cooperate with the DRI’s investigation.

“It is a standard procedure for the group to follow international competitive bidding route for major capital expenditures to ensure transparency and competitiveness in the process,” it said.

“All our transactions are always conducted within the framework of extant regulatory guidelines and provisions.

“The fact that our projects have incurred the lowest cost across central, state and private utility players has gone to establish the robustness of the processes followed by our group.”

Meanwhile, a court in Brisbane has dismissed the Australian Conservation Foundation’s appeal against Adani’s controversial Carmichael coal mine in Queensland on 25 August.

Brazil opens vast Amazon reserve to mining

Image captionThe reserve was created in 1984 by the then-military government
Brazil’s government has abolished a vast national reserve in the Amazon to open up the area to mining.

The area, covering 46,000 sq km (17,800 sq miles), straddles the northern states of Amapa and Para, and is thought to be rich in gold, and other minerals.

The government said nine conservation and indigenous land areas within it would continue to be legally protected.

But activists have voiced concern that these areas could be badly compromised.

A decree from President Michel Temer abolished a protected area known as the National Reserve of Copper and Associates (Renca).

Its size is larger than Denmark and about 30% of it will be open to mining.

The mining and energy ministry says protected forest areas and indigenous reserves will not be affected.

“The objective of the measure is to attract new investments, generating wealth for the country and employment and income for society, always based on the precepts of sustainability,” the ministry said in a statement.

But opposition Senator Randolfe Rodrigues denounced the move as “the biggest attack on the Amazon of the last 50 years”, O Globo newspaper reported (in Portuguese).

Maurício Voivodic, head of the conservation body WWF in Brazil, warned last month that mining in the area would lead to “demographic explosion, deforestation, the destruction of water resources, the loss of biodiversity and the creation of land conflict”.

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According to the WWF report, the main area of interest for copper and gold exploration is in one of the protected areas, the Biological Reserve of Maicuru.

There is also said to be gold in the Para State forest, which lies within the area.

The WWF says there is potential for conflict too in two indigenous reserves that are home to various ethnic communities living in relative isolation.

WWF’s report said that a “gold rush in the region could create irreversible damage to these cultures”.

“If the government insisted on opening up these areas for mining without discussing environmental safeguards it will have to deal with an international outcry.”